Comparing KOF & Kearney

LEARNING OBJECTIVES1. To identify the strengths and weaknesses of the KOF and Kearney

index

2. To evaluate which is the best index for showing Globalization

A. T. Kearney Index

• Broken into 4 categories

–Economic Integration–Personal Contact–Technological Connectivity–Political Engagement

A.T. Kearney - Economic

• Trade & Foreign Direct Investment (FDI)

A. T. Kearney - Personal

• Telephone traffic

• Travel

• Remittances and Personal Transfers

A. T. Kearney - Technological

• Internet Users

• Internet Hosts

• Secures Servers

A. T. Kearney – Political

• International Organizations• U.N Peacekeeping• Treaties• Government Transfers

A. T Kearney – How is it calculated?

• The lowest value is given a 0, the highest is given a 1 and then relative values are given to the ones in between.

• FDI, Internet and Telephone Traffic is weighted double

• All scores are then summarized

A. T Kearney Advantages

• It covers 96% of worlds GDP

• It covers 84% of worlds Population

• Allows for comparison between countries

• Allows for comparison over time

A. T Kearney - Disadvantages

• Only 64 Countries are included in the index

• Weightings – who decides?

• How do you measure cultural trends?

A. T Kearney Criticisms

• Smaller countries tend to take the top places in the index due to higher proportion/importance of FDI – therefore suggesting an over importance of the size of the country.

A. T Kearney - Response

• Not statistically significant

Points of Note with KOF Index

• The KOF Index of 2009 shows that globalization is still on the rise, driven by increased economic and political globalization, while social globalization stagnates.

• According to the KOF Index of Globalization 2009, Belgium is the world's most globalised country, although it is not on the top of any of the three dimensions

Advantages of KOF

• The index allows comparing degree and changes in globalization over a large number of countries and more than 30 years.

• The KOF Index of Globalization 2009 is available for 158 countries over the period 1970–2006,

• It is calculated on the basis of 24 variables.

Advantages of KOF Index

• employing the weighted individual data series instead of using the aggregated lower-level globalization indices data can enter the higher levels of the index even if the value of a sub-index is not reported due to missing data

Disadvantages of KOF

• the results were sometimes driven by extreme outlying observations and missing values.

• cultural globalization mostly refers to the domination of U.S. cultural products. Arguably, the United States is the trend-setter in much of the global socio-cultural realm